Sick of saying or thinking the phrase ‘why can’t they stop spending?’
Psychology surrounding this states that it’s not just a simple matter of ‘stop spending all of your money’. Compulsive spending actually activates the brain’s reward centre, releasing Dopamine, the constantly sought ‘feel good’ drug for your mind. Over spending is so widely spread, at present, it currently effects over 98% of our clients. Behavioural finance, although an entire section of study within itself, is currently aiming to address the shortfalls and provide research into the cause, effects and remedies.
Learning to stop is not an easy process, nor sometimes is it needed in its entirety. We work specifically with the individual to understand the triggers leading to this type of behaviour. We give them the tools to understand, acknowledge and empower. We then come up with tailored strategies to help shift the behaviour to benefit themselves.
We need to acknowledge that the urge may never stop, however with strategies introduced to slow or delay the spending and introduced milestones and tasks to empower the individual we can help create healthy spending habits. We are then able to put some time between the desire to spend and the physical purchase, by creating these steps we are afforded the ability to decide whether it is a need or want.
More on Needs Vs Wants next week.
